A ten million dollar life insurance policy may seem like a lot of money. If you’re considering such a policy, you have both a high income and some other assets that you are trying to protect. The main reason to invest in a $10 million dollar policy is to pass this wealth onto your heirs. They will then get a nice, tax-free lump sum of money. Ten million may seem like a lot, but if you have a large family that has to split the inheritance, it might not be as much as you thought. The usual rule of thumb is that you need a policy that is 10 to 15 times your annual salary, so anyone who earns more than a million dollars a year should consider at least ten million dollars’ worth of life insurance.
Are You Qualified to Get a $10 Million Life Insurance Policy?
First of all, your insurance company will require that you demonstrate why you need a 10 million dollar policy. They will be looking to see if your assets warrant that much life insurance, because life insurance is supposed to protect wealth to pass on to your beneficiaries, not build wealth so you can go on lavish vacations every year. Ten million dollar policies are a niche market, and life insurance companies will want to see proof of your assets. They use what they call a premium-to-income relationship. Your total premiums should not exceed 10% of your pre-tax income. Be prepared to provide documentation to support your claims. Acceptable documentation can include:
- Tax returns
- Investment statements
- Real estate appraisals (on each property)
- W-2 forms
- Debts
- Passive income (income from investments)
- Charitable giving statements
If you do qualify, how much will you pay?
In short, it depends on the type of life insurance policy you want:
- A $10 Million 20-year term life policy can cost as cheap as $5,213 in annual premiums
- A $10 Million whole life policy paying premiums in 20 years can cost as expensive as $199,400 in annual premiums
- A $10 Million guaranteed universal life insurance (or GUL) policy paying premiums in 20 years costs less than half the cost of whole life premiums, just $79,451 in annual premiums
Be sure to get quotes from several companies or a digital broker to compare and select the best one for you:
How Much does a $10 Million Term Life Policy Cost?
These are 20-year term insurance life quotes for a 40-year old male living in California, with excellent health. Click on the link to read our full review of the insurance companies.
| Insurance Companies | Coverage | Annual Premiums |
| Lincoln Financial | 10 million | $5,213 |
| Principal National | 10 million | $5,225 |
| AXA Equitable Life | 10 million | $5,275 |
| Symetra Life Insurance | 10 million | $5,309 |
| AG-American General | 10 million | $5,368 |
| Protective Life | 10 million | $5,403 |
| Penn Mutual | 10 million | $5,413 |
| Pacific Life | 10 million | $5,490 |
Term insurance is generally the most affordable type of insurance. If you’re looking for a $10 million dollar policy, you want to pass that money onto your heirs. This would only work if you die sometime during the term. If you outlive the term, you will stop paying the premiums, but you’ll also lose the policy, so your heirs will not receive a tax-free death benefit from your insurance. They can inherit your other assets, but they’ll pay taxes on those. If all you need is life insurance, term insurance is generally a good buy.
>>MORE: How Much Does $5 Million Life Insurance Policy Cost? and How Much Does $2 Million Life Insurance Policy Cost?
How Much does a $10 Million Whole life Insurance Policy Cost?
The advantage of a whole life insurance policy is that it does what you want it to do: it serves as a tax-free way to leave money to your beneficiaries. Since it lasts your whole life, your heirs will receive the money whenever you die.
A huge disadvantage of whole life insurance is that it’s expensive. Here are two cheapest quotes we found for our 40-year old male with excellent health living in California. And he plans to pay premiums for 20 years, or until he reaches 60 years old.
| Insurance Companies | Coverage | Annual Premiums |
| Penn Mutual | 10 million | $199,400 |
| Mass Mutual | 10 million | $227,000 |
As you can see, even if you’re a millionaire, those prices are pretty steep. And you’ll pay those prices every year, or risk losing the policy. You can withdraw from the cash value if you need to, but if you never pay it back, it’ll reduce the death benefit and that’s why you bought the policy in the first place, isn’t it?
These companies are both mutual companies, so you will earn dividends, which you can then reinvest, use to pay the premiums, or buy additional life insurance.
>>MORE: Understanding How Dividend Paying Whole Life Insurance Works
How Much does a $10 Million Guaranteed Universal Life Insurance (or GUL) Policy Cost?
| Insurance Companies | Coverage | Annual Premiums |
| Penn Mutual | 10 million | $79,451 |
| Prudential | 10 million | $87,500 |
| Nationwide (IUL) | 10 million | $88,114 |
| American National | 10 million | $93,417 |
| Nationwide (GUL) | 10 million | $96,308 |
These quotes above are also with 20 years of premiums payment. They are much more reasonable than the whole life policy quotes, and the insurance still lasts your entire life. The only difference is that a guaranteed universal life insurance (or GUL) policy doesn’t build a cash value account. However, the first quote from Nationwide is for an indexed universal life insurance (or IUL) policy, which would offer a cash value account. If you are in the market for a $10 million dollar life insurance policy, you probably have other assets you can use in an emergency. Therefore, you don’t need a cash value account.
If you want to get and compare several quotes more efficiently, you can work with a digital broker specializing in GUL or permanent life insurance in general such as Amplify. They are able to pull GUL quotes from several companies and help you compare and select the best one:
>>MORE: Understanding How Guaranteed Universal Life Insurance Works
You will, however, need a good way to pass your significant assets onto your heirs without paying what could be a hefty tax bill. Guaranteed Universal life insurance is perfect for this situation. Taxes can be so high that some people are forced to sell off property to pay the tax bill when the policyholder dies.
>>MORE: Compare Guaranteed Universal Life Insurance With Whole Life Insurance
Last Thoughts
Term insurance is definitely the cheapest $10 million dollar policy you’ll find. However, it doesn’t protect your estate from the burden of taxes, which can be significant. Whole life will do this, but it is expensive and provides a cash value account that you probably don’t really need. A GUL will last your entire life and leave a nice tax-free death benefit for your heirs.
>>MORE: Why Is Indexed Universal Life Insurance (or IUL) a Great Option for Retirement Savings?